The monthly roundup from Editor-in-Chief Susan Sutton.
I hate to admit it, but I'm pretty superstitious. The
neighbor's black cat makes me nervous, I want to stay in bed whenever the 13th
of a given month falls on a Friday, and I never pick up pennies from the
sidewalk because I can't remember if they should be heads or tails up for good
luck.
Superstitions can provide us with a feeling of control:
if A occurs, then B will surely follow. They enable us to predict future events
and provide a semblance of structure to our lives, which we could certainly use
these days. Our world seems more uncertain than ever. The effects of the
sub-prime mortgage crisis are being felt well beyond the consumers and lenders
involved. In fact, the ripples are reaching even beyond the U.S. as foreign
investment banks are recording record losses. The ongoing domestic housing
slump, coupled with increasing and unstable oil prices, has many economists
whispering
recession.
Manufacturers do have cause for some optimism, however.
According to the U.S. Census Bureau, new orders for manufactured goods in
October 2007 (the most recent data available at press time) increased by $2.3
billion, or 0.5%, to $423.5 billion, following a 0.3% increase in September.
Unfilled orders increased by $7.7 billion (1.0%) to $779.5 billion, their
highest level since the series was first stated on a North American Industry
Classification System (NAICS) basis in 1992, and followed a 1.1% September
increase.
Employment statistics from the U.S. Bureau of Labor
Statistics provide a mixed view. Non-farm payroll employment continued to
increase in November 2007 (94,000), and the unemployment rate was unchanged at
4.7%. Professional and technical services employment was up by 24,000 for the
month, reflecting growth in computer systems design and in management and
technical consulting.
Employment in manufacturing continued its downward trend
for November, however (-11,000). Job losses continued in two industries closely
tied to housing: nonmetallic mineral products (such as concrete and glass) and
wood products. In contrast, machinery manufacturing continued to add jobs
(4000). The employment-population ratio rose by 0.3% to 63%, but this is down
from its most recent peak of 63.4% in December 2006.
As I write this column, the Federal Reserve
is expected to announce another interest rate cut. According to Martin
Crutsinger, Associated Press economics writer, "many analysts believe the
current quarter and the early part of next year will represent the period of
maximum danger for a possible recession. 'I think a full-blown recession can be
avoided, but just barely,' said David Jones, chief economist at DMJ Advisors.
He predicted that the Fed will follow up its expected December rate cut with
three more reductions at its first three meetings of 2008."
In
2008,
CI
will continue to provide you with the information and services you need to
succeed. I wish we could throw a little salt over our shoulder and make all the
bad economic luck go away. Knock on wood, those rate cuts will do the trick.
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